IRDA has asked insurance companies to carry a warning in their advertisements from February 1, 2014 in a bid to check fraudulent sales calls. The warning will highlight that IRDA is not involved in the selling and marketing of insurance policies
Earlier, IRDA found that some fraudulent callers posing as IRDA employees were making phone calls to people to sell insurance policies.
Suresh Sadagopan of Ladder7 Financial Advisories says his clients often complain of receiving spurious phone calls from people posing as IRDAemployees. A few months back, he got a similar call from a sales person asking him to surrender the existing policy for a new policy. Also, the sales person had offered him help in getting back the total premium paid over the years without incurring any surrender charges.
Ritesh Sheth of Tejas Consultancy pointed out that that incidence of fraudulent calls has increased after implementation of new product guidelines. “Two of my clients fell prey to such callers who promised them hefty bonuses from insurance company in exchange for a processing fee.” He is of the view that the root cause behind such activity is leakage in customer’s database.
Last week, a Cafemutual correspondent received a similar call from a sales person claiming to be from IRDA. After verifying the policy details of the correspondent, the sales person tried to lure him to replace the existing policy with a new one. The sales person offered equivalent sum assured by paying only half the premium which the correspondent was paying currently.
Experts say that first fraudulent calls usually come from outbound phone numbers where you cannot call back since there is no incoming facility in thatsystem. They also say that people residing in small cities and rural areas often fall in such trap due to lack of awareness and tall claims of callers.
The IRDA circular says, “It was unanimously decided during the meeting that IRDA will create a slide on ‘Fraudulent Selling of Life Insurance Products’ and send it to all life insurers to enable them to insert it at the end of all their product advertisements with a view to educate the customers on the role of regulator and also caution the public on spurious calls.”
IRDA clarified the format that all advertisements from the specified date will have to carry – a headline–‘Beware of Spurious Phone Calls and Fictitious/ Fraudulent Offers’ and message - IRDA or its officials do not involve in activities like sale of any kind of insurance of financial products nor invest premiums. Also, IRDA does not announce any bonus.
The regulator has asked insurance companies to put this message in all print as well as electronic advertisements from February 1, 2014. The electronic add will include this slide with a voice over of this content in clear terms.
IRDA has urged people to lodge an FIR with the police if they receive such spurious phone calls.